Tips and Techniques for Wholesaling Properties Quickly
The 9 most effective and efficient ways to wholesale your property quickly - by Brad Zitzner
Have your Realtor do a radius search in the MLS for properties that have sold within.5 miles in the past 6 months. Look at all the houses for sale and compare those houses to the one you have under contract to purchase. Don't call the listing agent. Call the agent who sold the property. Find out the condition of that house and how it compares with yours. Since you already know the sales price, and the financing method, you can compare the quality of that house to the quality of your house. If your house is better than their house, then you can make a judgment as to how much more to ask for it. If your house is worse than their house, then you must determine how much less to ask for your property than their property. This method seems simple, and it is, but it requires you to pick up the phone and call lots of real estate agents out of the blue. If you want to be successful at wholesaling properties, this is by far the most effective method, and the most efficient use of your time.
You will find out very quickly what others are buying, why they are buying and what that markets it truly like today. Not last year, but today.
Things to consider:
If you find that all the houses you are calling on sold for less than what you need out of your house, and they are similar in quality, condition, and location, you can quickly determine that your deal is not really a deal. If this happens, you need to move onto the next deal as quickly as possible.
When you talk to the real estate agent about the property they sold, make sure that you listen intently before describing what you have for sale. Let's say that they sold their house for $25,000 and you would be happy getting $25,000 for your house; however, in talking with them, you discover they had a foundation problem, mold, and a bad gas line. You may be throwing money away by offering your property at $25,000 before listening to them. In this case, you may find that your house is actually worth $30,000 or $35,000. You just need to listen first before offering your house for sale.
When you talk with the real estate agent, make sure that you let them know what is in it for them. When they sell other properties, they are always granted a commission by the seller. Make sure that you factor in paying them their standard rate or more.
The reason that going to these agents is the number one method to getting your house wholesaled is that these agents are typically the easiest to communicate your needs to. You already know that they work with investors. You already know that they represent buyers who are actually buying today. They will probably understand your point of view. And you will find that many of these agents are actually buyers themselves. They can assess your property quickly and they can let you know whether or not your pricing expectations are realistic in today's market.
Go to a real estate auction or sheriff's sale and see who bids the most for the same type of property that you are looking to wholesale.
Using this method, we used to come across many more buyers than we can today. However, you will find that the buyers who are bidding the most are typically newer investors and might not know all the angles. As a consequence, when you share a deal with them, I have found auction buyers to be much more hesitant than REO buyers. I call this phenomenon the auction phenomenon. You can present the exact same deal to an auction buyer, however, if they are not buying it at an auction, they might not be interested.
We Buy Houses Signs
Drive the neighborhood and write down every for rent sign and every sign that says we buy houses. In some areas, these may be hard to find and in other areas they will be prevalent.
Often when you call the we-buy-houses signs, you will talk with a third party operator. In an effort to get them to call you back, make sure that you tell them that you come across lots of deals. Every time I talk to the operator, I will say "I buy and sell properties all over the state, and I am looking for somebody local who can purchase a number of properties from me this year". Doing this will greatly increase your chances of getting to the decision maker.
You might assume that since they are taking the time to put up the signs, and pay an operating service that they would return every call. However, in my experience, this is definitely not the case. They want the service to screen out 90% of the calls so that they are only talking to motivated seller. (You and me).
When you are calling for rent signs, you may find that these investors are much less enthusiastic about buying more properties. However, if you take the time to listen to their story and get to know them, you will have a much better chance at introducing a property that might fit their portfolio. As a rule of thumb, I try to move much slower when talking with for rent signs and much faster when talking with we buy houses signs. Remember, you might be the first person in 6 months to call a for rent sign for the purpose of selling them another house. Whereas, you might be the 5th person that day to call the we buy houses sign. Their goal is to get information and get off the phone. The goals of the landlords are going to be much different.
Just like calling on the signs, there will likely be lots of numbers to call from the newspaper. Be sure to document the numbers you are calling from a centralized database. We use www.zzzrealestate.com as our database. You don't want to be calling the same people more than once with the same script.
When you are calling on classified ads, your goal is to get into a position of listening as quickly as possible. You are calling them, so you will need to spend a couple of minutes describing your reason for calling. After that, just listen. Try to discover their goals as an active real estate investor.
A little note about calling random people out of the blue.
I have found that I need to get geared up for this type of activity. I am not an overly gregarious or extroverted person, thus I find that I want to procrastinate on this type of task.
However, I have found this task to be the number one driver of cash into the business so I have learned to overcome this.
Don't call 4 people. Call 40! Once I get into the mode of calling 4 people out of the blue, and listening to their story, there is no reason to stop. I try to block out an entire afternoon for this type of activity. Doing this has built an amazing database of investors, and it allows us to operate much more on autopilot than before. For example: If I get a property in Cincinnati, I can call two people whom I have dealt with lots of times. They will quickly assess the property and get back with me. I have this network in Columbus, Akron, Cleveland, Dayton, etc. etc.
However, this database came from making hundreds of calls and listening to hundreds of people. If you are hesitant about calling people out of the blue and talking about real estate, my answer is to do it anyway. The truth is that nobody I know really wants to do this; however, after a while, you might find it to be fun!
P.S. Always get their email address and ask if it's OK to email them deals from time to time. Almost nobody says no to that.
P.P.S Always make these calls in front of a computer so that you can document the conversation. Once you make 5-10 calls, they will run together. If you can't remember who you spoke to about what, you are completely wasting your time. Spend 1 to 5 minutes after every conversation and write down everything you can!
Sell to Your Contractor
Most contractors that I've worked with don't consider themselves to be buyers until you bring a deal to them. They are often so driven to find work for their subs that they are oblivious to the deals around them. I can't tell you how many times we have shown a property to a contractor for the purpose of a bid, and ended up selling the property to them instead. Contractors don't typically take the time to go out and find the deals for themselves, but they will often buy a property during times when their crews are low on work. They will do this for two reasons. The first reason is that they fear losing a good employee or subcontractor if they can't keep them busy. The second reason is that they can typically do work for much cheaper than other investors, thus they can pay the same amount as other investors and ultimately profit off their reduced labor.
Always try to remember to ask your contractors if they are looking for a good deal. You might be surprised.
Use Local Resources
Go to your local reia meeting. It might be a complete waste of your time to try to sell your deal from the reia meeting; however, it will not be a waste of your time to go and listen to what others are trying to do. Your main objective should be to find the 3 to 5 people who are doing lots of deals and to get to know them. Work on building a relationship, not on selling a particular house. Doing this will ultimately result in a long term relationship where you can ultimately work together rather than immediately working against each other.
The first five methods talk about ways to sell your property while you have it under contract and before actually closing on the property. The next couple of methods work great after you own the property.
List your property in the MLS. I don't know how many times I've talked to other investors who can't sell their house and they never even listed it for sale. They state, they can't afford to pay the commission. I cannot understand this logic. If they sit on it for a while, not only will they not be able to afford the commission, but they will also not be able to afford the additional holding cost. I still don't know of a better way to sell your property than to make it available to everybody who looks at the MLS. This has by far the most eyeballs of any method.
Put the property on Craig's list. You might not find lots of qualified buyers on Craig's list, but you must be able to sort through lots of leads to find the one that matters. Using Post Lets www.postlets.com makes getting your property on the internet quick and easy.
Position yourself as an expert. Write an e-book. Publish some articles. Write a column for the newspaper. Speak at a reia. People will then turn to you for advice.
For a FREE PDF of our new E-Book "The Help-U-Buy Way" our complete guide to our retail and wholesale sales strategies, email me at firstname.lastname@example.org.